What is a Bearish Catapult?

by | Mar 9, 2015 | Videos, Chart School, Technical Analysis

Last week I talked about a point and figure pattern called the bullish catapult. This week Tim explains its less friendly counterpart, the bearish catapult.

As you might have been able to gather from its name, the bearish catapult is not a positive pattern. It involves a triple bottom sell signal, followed by a double bottom sell signal. In the video, Tim has an example up on our big board. You can clearly see the accelerating negativity this pattern describes.

In addition to the triple bottom sell signal and the ensuing double bottom sell signal, lower tops are also made during the bearish catapult pattern. Lower tops tell us that demand in the security is drying up and supply is taking over. More supply and less demand is a recipe for lower prices. Bearish catapults are often (but not always) seen in negatively trending securities.

Check out the video for a great example from Tim!

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